As the author of a forthcoming book on the impact of the internet on repressive regimes, Evgeny Morozov has a personal contact list that the authorities in many countries would no doubt love to get their hands on.

“I’ve travelled widely in central Europe and Asia, I’ve met a lot of people on the cutting edge of dealing with this issue,” he says.

So when it looked like a new internet service from Google might inadvertently “out” some of his best contacts, prompting their names to be published online, Mr Morozov was less than pleased. “It’s a big company where most of the decisions are made by engineers,” he complains of Google-. “They have not done enough for us as users.”

The cause of his anger is a social networking service known as Buzz. Launched 10 days ago, it is meant to give Google a stronger foothold in the booming social networking business, where it is rapidly losing ground to Facebook and Twitter. Its main effect in the short term, however, has been to stir up an outcry over privacy that the internet giant could have done without

also served to reinforce a bigger narrative about Google that has surfaced in other ways this week. This holds that the company is prepared to use its growing market power as a blunt instrument to muscle its way into new markets – and is not too concerned about whose feet it treads on in the process.

In one sign of these growing fears, even Vittorio Colao, chief executive of Vodafone – nominally one of Google’s business partners – raised a red flag over the potential spread of its search dominance into the mobile world. Regulators should take a close look at Google’s massive market share in search, he said, “before it is too late”.

Internet users such as Mr Morozov, meanwhile, have been left feeling like pawns in a game being played out between corporate giants, with their own interests relegated to a secondary position. Because Google is “losing traffic to Facebook and Twitter, they have to do something”, he says of the handling of the Buzz launch.

He is far from alone in accusing Google of playing fast and loose with its users’ privacy in its urgency to catch up. The outcry included an official complaint to US regulators and left Google scrambling to stem the anger, with a public apology and two changes to the service announced within its first four days. In the aftermath of its recent decision to abandon censorship of its search results in China, this looked like another case of testing the limits of the “Don’t be evil” motto, only to later back down.

At the root of the problem is Google’s decision to use Gmail, with its 175m active users, as a launchpad for its latest push into social networking. All users were enrolled as soon as they clicked a link to look at the service, and many found the names of those they corresponded with most frequently by e-mail – usually a private list – became the basis for a public “social network” of contacts on Buzz. That risked exposing the details of “estranged spouses, current lovers, attorneys and doctors”, according to the complaint to the US Federal Trade Commission from the Electronic Privacy Information Center (Epic), a privacy advocacy group in Washington.

Google executives concede that they did not do enough to warn users that their private contacts would be disclosed publicly. But they put this down to a mistake made in good faith and characterise it as one of the inevitable teething problems of a new online service.

“You can’t incubate these kinds of products in a Petri dish and pull back the covers on a fully baked opus,” says Bradley Horowitz, vice-president of product management for Google’s applications business. “If you look at any company that’s been successful in this space it’s because they have been able to iterate, refine, listen, stumble, dust themselves off, get up.”

However, Marc Rotenberg, executive director of Epic, says that Buzz’s privacy settings were in fact the product of a deep corporate agenda. “The way they could compete was to enlist all their Gmail subscribers. That’s a very clear corporate decision.”

Google executives deny the accusation. “It’s abundantly clear you can’t force-feed users features and capabilities that they don’t want,” says Mr Horowitz. Rather, he says, Buzz is “a very logical extension of the product,” adding: “It has a very natural resonance with Gmail. Within Gmail there has been an incredible amount of sharing and activity along these lines and we wanted to provide a better experience to scratch that itch, or impulse.”

. . .

Whatever the reality, botching the launch of the strategically important Buzz has intensified a feeling that has been growing as Google has sought to extend its reach: that it is deliberately using its dominance in one area to gain a stronger foothold in new markets, much as arch-rival Microsoft did before it.

Antitrust regulators have already rebuffed Google’s attempt to forge a deal with Yahoo in search and are investigating its plans to extend its advertising reach into the mobile arena through the acquisition of Admob. This week, in clearing a rival Microsoft search alliance with Yahoo, the US Department of Justice highlighted the arrangement’s importance in countering Google’s “dominance” of internet search and the advertising that accompanies it.

In any other industry, Google’s conduct would be considered good corporate practice. In the technology world, however, where start-ups with disruptive new products are romanticised and companies such as Apple and Google have built their brands largely on their ability to out-innovate rather than outmanoeuvre their competitors, it is often seen as unimaginative.

The response from business experts: get over it. “Google’s goal is to be ubiquitous on the web – they’ve never made any secret of that,” says Jeffrey Pfeffer, a Stanford University professor who is a strong supporter of the company. “They’re like every other organisation, they don’t do things perfectly. But if Google has a monopoly, it will at least be because it has better products.”

For ordinary internet users, there are clear potential benefits from Google’s strategy of extending its influence into more and more corners of the internet – as well as some obvious dangers.

Even critics such as Mr Rotenberg concede that the integration of the group’s many applications across the web already makes life easier for users: they can move information more easily between e-mail and an online calendar, for instance. That integration, according to Google, is about to spread to what have until now been discrete online communication tools, such as e-mail and social networking services.

“You will see this extension in communications working in both ways: social networks will embrace chat, many of them already have,” says Mr Horowitz. “They’ll eventually emb­race e-mail and these things will converge. It’s not about markets colliding, it’s a very natural impulse – when you want to communicate with people, you want to share with them.”

Yet as the Buzz privacy debacle has shown, internet users have different expectations of the different services they use. Trying to merge them can lead to confusion and distrust.

Facebook has learnt this to its cost. In its pursuit of Twitter, where most communication takes place in public, it recently reset some of the default settings for its users so that more of their information appears publicly. As with Buzz, that brought an outcry from privacy interest groups.

. . .

Unsettling loyal users is only part of the danger. Like Microsoft before it, Google also risks antagonising business partners and regulators. Any move into a new area can now seem like a naked attempt to grab market share, or a defensive gambit to shore up a weak flank.

The warning from Mr Colao of Vodafone, for example, is a sign that mobile operators are starting to worry that Google’s dominant advertising business will eventually suck all the profits out of their industry.

That fear echoes the mobile industry’s distrust of Microsoft a decade ago, when it tried to extend its Windows monopoly on to phone handsets. In a telling moment earlier this week, Google revealed that 60,000 handsets a day are now being shipped with its Android software installed – a rate that eclipses the number of handsets carrying Windows.

This and Google’s other moves into mobile were the main subject of behind-the-scenes discussion at the mobile industry’s biggest annual gathering, in Barcelona this week, says John Jackson, an analyst at CCS Insight. “There’s a fair case to say that they’ve overplayed their hand,” he says. “They have done themselves a disservice by creating a climate of uncertainty around their intentions.”

For now, the mobile industry has not reacted to Google’s incursions by repelling it: its open-source Android software is viewed as an independent platform to counter giants such as Nokia and Apple, making Google still more of an ally than a threat.

After the rapid changes it has made to correct the missteps in Buzz, the privacy row will no doubt fade and users may indeed see the benefits in a social networking service tied closely to their e-mail. But this week’s developments carry a clear message: if Google wants to keep the goodwill of customers and business partners as it continues to expand, it must work harder to convince them it truly has their interests at heart.

Copyright The Financial Times Limited 2010. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.